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re: When does the IRS consider someone a professional?
Posted on 8/28/26 at 11:47 am to jonnyanony
Posted on 8/28/26 at 11:47 am to jonnyanony
quote:
The IRS doesn't consider someone a professional.
The IRS considers income.
Technically not true, though I guess we can play semantics on their termonology. The IRS has "activity not engaged in for profit", which would generally be considered your hobby (amateur) type income. Then you have business (professional) income.
Where and how the IRS treats college athletes differently than professional athletes, is NIL income is considered self-employment income and reported via 1099. Professional athletes are w2 employees of the team.
So, from a legal tax perspective, earning money for NIL is a self-employed business separate from competing in college athletics and not a salary for competing in said sport. Again, we can get into semantics of everything but from a legal perspective, they are wholly separate things.
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Posted on 8/28/26 at 11:48 am to thatthang
That's a completely different definition of professional.
Posted on 8/28/26 at 11:49 am to GoCrazyAuburn
quote:
Where and how the IRS treats college athletes differently than professional athletes, is NIL income is considered self-employment income and reported via 1099. Professional athletes are w2 employees of the team.
Right, but this is just a matter of compensation and FICA contributions, etc. Your filter type doesn't mean anything to them in terms of "professionalism," just in terms of effective tax rate(s).
Posted on 8/28/26 at 11:50 am to GAT BoilerPickle Doc
quote:
Thus the IRS doesn't make a distinction between 500k paid to John Doe regardless if he's compensated by the Dallas Cowboys or Texas Longhorns ... correct?
No, However they do make a distinction between being paid $500k as a w2 employee of the dallas cowboys and being paid as a self-employeed 1099 from a third party entity.
quote:
Once a professional, always a professional regardless of the employer
Well, the employer for the college athletes is themselves, so technically speaking, this is not true. The employer absolutely matters with how you are trying to define "professional".
Posted on 8/28/26 at 12:00 pm to jonnyanony
quote:
That's a completely different definition of professional.
Yes, 100%. I was just addressing what appeared to be a blanket statement by clarifying that the IRS does, in fact, get into the business of defining professionals in some fields.
Posted on 8/28/26 at 12:12 pm to GAT BoilerPickle Doc
If you’re getting a W2 or 1099, you better be filing.
If you’re not getting a W2 or 1099, the IRS is way more interested in who is not filing those than you.
Was I a “professional” when I was 20 yo and getting paid $10K+? Absolutely not. Did that matter? No. The IRS doesn’t label as such.
If you’re not getting a W2 or 1099, the IRS is way more interested in who is not filing those than you.
Was I a “professional” when I was 20 yo and getting paid $10K+? Absolutely not. Did that matter? No. The IRS doesn’t label as such.
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